Unit 4 - Real Estate Agency Flashcards
Define Statutory Law
The laws, rules & regulations enacted by legislatures
Define Common Law
The rules of a society established by court decisions
Define General Agency
The relationship of the broker. managing broker or leasing agent
Agency relationships in Illinois are governed under which law?
Under statutory law & based on Article 15 of the Real Estate License Act of 2000
Define Agency
A relationship in which a real estate broker or licensee represents a consumer with the consumers consent
Define Agent
The individual who is authorized and consents to represent the interest of another person
Define a Brokerage Agreement
An agreement between a sponsoring broker and a consumer for licensed activities to be provided
Define a Consumer
A person or entity seeking or receiving licensed activities
Define a Client
A person who is being represented by a licensee
Define a Customer
A consumer who isnt being represented but is receiving ministerial acts
Define Ministerial Acts
Acts that a licensee may perform for a consumer that are informative or clerical
Define a Principle
The client to whom the agent gives advise and counsel
Define a Fiduciary
One who is placed in a position of trust and confidence
What are the Fiduciary Duties
Care Obedience Loyalty Disclosure Accounting Confidentiality
Duty of Care
The agent should know all facts pertinent to the principles affairs
Duty of Obedience
The fiduciary relationship obligates the agent to act in good faith at all times
Duty of Loyalty
Illinois license law prohibits a licensee to serve as a dual agent in any transaction in which they are a party to the transaction
Duty of Disclosure
The agent is obligated to disclose facts that a reasonable person would feel are important in choosing a course of action
Duty of Accounting
Illinois licensees are required to deliver true copies of all executed or initialed documents within 24 hours
Duty of Confidentiality
Client information that can affect negotiations must be kept confidential
Define Conversion/Commingling
The practice of using escrow funds as the licensees own money which is illegal
Define a Material Fact
Any fact that, if known, may reasonably be expected to affect the course of events
Opinion vs Fact
Real Estate licensees and staff members must always be careful that the consumer understands whether a statement is opinion or fact
Define Puffing
Generalized, vague, exaggeration of a properties benefits
Define Negligent Misrepresentation
Occurs when the licensee shouldve known that a statement about a material fact was false
Illinois Real Estate License Act
Clearly states that a licensee shall not be liable to a client for providing false info if the false info was provided by the customer
Define Latent Defect
A structural defect that would not normally be uncovered over the course of an ordinary inspection
Define Stigmatized Properties
Properties that society has branded undesirable because of events that occurred there
Define Megans Law
A general name for state and federal laws requiring law enforcement to make registered sex offender information public
How can an agency be formed?
Based on a formal agreement (express agency) or from the parties behavior (implied agency)
Real Estate License Act of 2000
Requires that all exclusive brokerage agreements be in writing
Define Gratuitous Agency
An agency that exists even if no fee is involved
In Illinois…
The licensee is required to disclose to a client the sponsoring brokers compensation and policy
In Illinois…
Licensees are not allowed to obtain a written brokerage agreement that doesn’t expire automatically
Define an Agency Coupled with an Interest
The agent has an interest in the subject of the agency, such as the property being sold
Define a Universal Agent
A person empowered to do anything the principle could do personally
Define a General Agent
May represent the principle in a broad range of matters related to a particular business/activity
Define a Special Agent
Authorized to represent the principle in one specific act or business transaction
Define a Designated Agent
A person authorized by the sponsoring broker to act as the agent of a specific principle
Define Single Agency
When an agent/firm represents only one party exclusively in a real estate transaction
Define Dual Agency
The agent represents 2 principles in the same transaction (requires consent from both parties)
